Importation and Article 30

The inspection fee paragraph 1 is levied on the product because it crosses the border into the UK, making it a breach of Article 30. It is not a customs duty as it is neither a ban nor a quota, but instead a CEE which is also prohibited as seen in Commission v Italy (the ‘Statistical Levy’ case), even if the charge is non-protectionist (Diamantarbeiders). The Commission v Germany case stated there are three exceptions to Article 30; (1) when the charge is a general system of internal dues applied to imported and domestic products equally; (2) they are fees for services rendered to the importer; and (3) charges for mandatory inspections required by EU law (not applicable here). In order for a service to be applicable there needs to be consideration, a benefit to the importer, and the fee must be proportionate with the service provided (Commission v Belgium (the ‘customs warehouses’ case)). The inspection could arguably benefit the importer as it gives the consumer added confidence in the product and therefore provides consideration. However, the fee is not proportionate to the service provided as it will substantially increase the importer’s costs, putting them at a competitive disadvantage against domestic E-reader manufacturers. The inspection fee could also be an internal due. In Dansk Denkavit the CJ accepted this argument as the Danish government required the domestic manufacturers to pay the charge making it a genuine tax. Nevertheless the fee is only levied on imported products and it will still constitute a CEE (Bresciani).

The higher taxation on imported E-readers in comparison to domestic E-readers and books in paragraph 2, are both discriminatory internal taxation and breaches Article 110. Article 110(1) states that Member States are obliged to tax similar imported and domestic products equally. The imported and domestic E-readers in this case are identical and the UK directly levying a higher taxation on imported E-readers is a breach of this article. This case mirrors Commission v Italy, where the Italian government were found to have directly discriminated against foreign regenerated oil.

As mentioned above, in order to breach Article 110(1), the products are required to be similar. Books and E-readers both compete in the literature market, but as in Walker (John) v Ministeriet for Skatter, the products have “manifestly different characteristics" thereby making them non-similar products. Nevertheless, the products will instead breach Article 110(2), as they are partially, indirectly or potentially in competition with each other (Commission v France (the ‘Spirits’ case). The UK manufactures very few E-readers and by imposing a lower taxation on domestic E-readers and books, the government is indirectly discriminating and being protectionist against imported E-readers (Cooperative Co-Frutta). The remedy for a breach under Article 110(1) is for the Member State to equalize the tax regime in respect of the similar product, while under Article 110(2), the Member State must remove the protective effect.

The UK governments’ literacy campaign referred to in Paragraph 3 is a non-fiscal measure and comes under Article 34. The campaign is not a QR as it is neither a ban nor quota on any imported products (Henn and Darby) and isn’t a ‘selling arrangement’ as it does not apply equally in fact and law (Keck). However, the Dassonville test states a charge is a MEQR if it is; ‘capable of hindering, directly or indirectly, actually or potentially, intra-Community trade.’ In Commission v Ireland (Buy Irish) the Irish government’s campaign to encourage consumers to buy Irish products was deemed to be a distinctly applicable MEQR as it directly harmed imported products. Similarly, the literacy campaign is also a distinctly applicable MEQR, as it directly promotes domestic products over imports. As the ‘Association of British Booksellers’ is a semi-public body it is also bound by Article 34.

Under the Article 36 derogations, the UK could argue that the campaign is required by public policy. However, this derogation has only been successful once before as the CJ interpret it narrowly stating it cannot be used as a general safeguard (Commission v Italy (re ban on pork imports)). The ‘protection of national treasures’ derogation was raised in Commission v Italy (the ‘Italian Art’ case), but there is yet to be a case decided on it. Even so, in order for a derogation to work it needs to be proportionate. In C v Netherlands, the Dutch government’s blanket ban on fortified foods on the grounds of public health risks was not considered proportionate. Likewise, the ‘protection of national treasures’ derogation would presumably only be proportionate here if it was used to protect individual items of national importance.

The legal regulations implemented by the UK requiring electronic goods (including the ‘e-livre’) to be sold by trained staff members, is a non-fiscal measure. However, as the regulations are applied regardless of the products origin, it could constitute a ‘selling arrangement’ and therefore not come within Article 34. The Keck case states a selling arrangement must apply to all affected trades operating within the Member State; and affect equally in fact and law the marketing of domestic and imported products. Similarly to the Tanstation case involving rules limiting the opening times of petrol stations, the UK’s legal regulations on electronic devices apply equally in law and in fact to all traders (Ko v Gourmet) and therefore meet Keck’s requirements of a selling arrangement. However, if the legal regulations were only binding on the ‘e-livre’ alone, then the regulations would be considered to be an indistinctly applicable MEQR instead and come within Article 34.

Finally, the UK ban on downloading adult magazines on to E-readers is again a non-fiscal measure. It is not a QR as the product itself is not banned but merely the content being downloaded on to the devices. On the facts it is arguably more likely to be a MEQR than a selling arrangement as the ban does not involve the selling or marketing of the product, but instead the alteration of it (the removal of the function to download such material). It is also an indistinctly applicable MEQR as in law the ban applies equally to imported and domestic products, but in fact affects imports more as it will require the importer to establish two separate production lines in order to abide by the UK ban, creating additional costs and making the product less competitive within the UK market. This is similar to Commission v Ireland (Re Dundalk Water Supply), where the Irish government requiring pipes within their state to be a specific size was deemed to be an indistinctly applicable MEQR as the Irish companies already produced the required sized pipes and put them at a competitive advantage over imports.

In response to the possible breach of Article 34, the UK may use the defences in Cassis de Dijon which include the ‘presumption of mutual recognition’ and the ‘rule of reason’. The presumption of mutual recognition is not applicable here as the facts do not state if the ban is imposed in other Member States. However, the rule of reason may work if there is a matter of overriding public interest for the ban (Cinetheque SA) and it is proportionate (C v Netherlands). In Commission v Denmark (the ‘Disposable Beer Cans’ Case), the requirement for drinks to be produced in a standard sized container for recycling was deemed proportionate to the objective of protecting the environment. However, the ban here would probably not be sufficiently proportionate as placing warnings or creating restrictions on the use of the material would be equally as effective. Therefore the UK remains in breach of Article 34.

To conclude, the UK has breached Articles 30, 110 and 34. Norman SA can take action internally by using the ‘preliminary reference procedure’ in Article 267 on these matters. The legal regulation concerning electronic devices is the only implementation which has not breached any of these articles and therefore Norman SA will not be able to act on it.

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Case List

Conceria Daniele Bresciani v Amministrazione delle Finanze Case (Case 87/75) [1976] ECR 129, [1976] 2 CMLR 62

Rewe-Zentral AG v Bundesmonopolverwaltung fur Branntwein (Cassis de Dijon) (Case 120/78) [1979] ECR 649, [1979] 3 CMLR 494

Cinetheque SA v Federation Nationale des Cinemas Francais (Cases 60/84 & 61/84) [1985] ECR 2605, [1986] 1 CMLR 365

Commission v Belgium (Customs Warehouse) (Case 132/82) [1983] ECR 1649

Commission v Denmark (Disposable Beer Cans) (Case 302/86) [1988] ECR 4607, [1989] 1 CMLR 619

Commission v France (French Taxation of Spirits) (Case 168/78) [1980] ECR 347, [1981] 2 CMLR 631

Commission v France (Levy on Reprographic Machines) (Case 90/79) [1981] ECR 283, [1981] 3 CMLR 1

Commission v Germany (Case 18/87) [1988] ECR 5427

Commission v Ireland (‘Buy Irish’ Campaign) (Case 249/81) [1982] ECR 4005, [1983] 2 CMLR 150

Commission v Ireland (Dundalk Water Scheme) (Case 45/87 [1988] ECR 4929

Commission v Italy (Case 21/79) [1980] ECR 1

Commission v Italy (Ban on Pork Imports) (Case 7/61) [1961] ECR 317, [1962] CMLR 3

Commission v Italy (Export Tax on Art Treasures (No 1)) (Case 7/68) [1968] ECR 423, [1969] CMLR 1

Commission v Italy (e Statistical Levy) (Case 24/68) [1969] ECR 193, [1971] CMLR 611

Commission v Netherlands C 41/02 [2004] ECR 1-11375

Cooperativa Co-Frutta Srl v Amministrazione delle Finanze dello Stato (Case 193/85) [1987] ECR 2085

Dansk Denkavit ApS v Danish Ministry of Agriculture (Case 29/87) [1988] ECR 2965

Procureur du Roi v Benoit and Gustave Dassonville (Case 8/74) {1974] ECR 837, [1974] 2 CMLR 436

Keck and Mithouard (Cases C-267/91 & C-268/91 [1993] ECR I-6097

Konsumentombudsmannen (KO) v Gourmet International Products AB (GIP) (Case C-405/98) [2001] ECR I-1795

Lutticke (Alfons) GmbH v Hauptzollamt Saarlouis (Case 57/65) [1966] ECR 205

NV Algemene Transport en Expeditie Onderneming van Gend en Loos v Nederlandse Administratie der Belastingen (Case 26/62) [1963] ECR 1

R v Henn & Darby (Case 34/79) [1979] ECR 3795, [1980] 1 CMLR 246, [1981] AC 850, [1980] 2 WLR 597, [1980] 2 All ER 166, 71 Cr App R 44

Sociaal Fonds voor6 de Diamantarbeiders v Chougol Diamond Co (Cases 2/69 & 3/69 [1969] ECR 211, [1969] CMLR 335

Criminal Proceedings against Tankstation ‘t Heukste vof and JBE Boermans (Cases C-401 & 402/92) [1994] ECR I-2199

Walker (John) v Ministeriet for Skatter (Case 243/84) [1986] ECR 875